Story of Sri Krishna and Banasur is found in the Mahabharata
(Sabha Parva Chapter 38) and Srimad Bhagavad Purana (Chapter X 61 – 63). Banasur
was the son of pious king Mahabali (who was pushed to netherworld by Vamana Avatar of Vishnu). He ruled from the city of Sonitapura.

To become invincible, Banasur performed severe penance
dedicated to Shiva. After several years, Shiva appeared before his devotee and
offered him two boons.

Banasur asked for thousand hands to fight his enemies as his
first boon and it was granted.

As his second boon, he wanted Shiva to guard the city of Sonitapura. This boon was
also granted.

With such huge powers in his disposal, the demon wanted to
fight with Shiva. A smiling Mahadev evaded Banasur by saying that he would meet
his worthy foe pretty soon.

Banasur had a beautiful daughter named Usha. She once had a
dream of a very handsome prince and fell deeply in love with him. Even after
waking up, Usha was immersed in the prince and forgot her daily chores.

Usha’s maid Chitralekha decided to help her. Using her
magical powers Chitralekha drew the pictures of all the princes on earth. After
scanning threw the pictures Usha finally zeroed down on Aniruddha, son of Sri
Krishna.

Using her magical powers Chitralekha brought Anirudha before
her in flesh and blood.

The two fell in love at first sight. Chitralekha helped the
princesses in meeting her lover.

But soon Banasur discovered the presence of Anirudha in his
palace and imprisoned him.

Krishna, who received the news of Aniruddha’s imprisonment,
besieged the city of Banasura.
In the battle, Sri Krishna cut down the thousands arms of Banasura and
annihilated the demon.